Personal

CDs & IRAs

Flexibility & Advantages You'll Love.

Individual Retirement Account (IRA) Certificate of Deposit

What will your retirement look like? Would you sleep better knowing you are prepared and on track to live the lifestyle you have envisioned in retirement?

An individual retirement account (or IRA) offers tax advantages to enable your savings to grow faster. When you fund your IRA with a fixed-rate CD, you'll achieve predictable interest earnings. You'll get fixed rates and FDIC insurance for up to $250,000.

Depending on the type of IRA you choose, your contributions may be tax deductible and will grow either tax deferred or tax free. Consult your tax professional to determine if your adjusted gross income allows you to qualify for a deduction for IRA contributions. At The First National Bank of Litchfield, we offer both traditional and Roth IRAs; and we will work with you to match the right product to your very specific needs and financial goals.

Terms of IRA CDs offered:

6 - 11 months
12 - 23 months
2-Year Double Bump
24 - 60 months

For more information about Individual Retirement Account CDs, visit any of our local branches or call us toll free at 888-567-1814.

Traditional IRA

With tax advantages, increased contributions and new catch-up provisions, traditional IRAs offer a smart way to save for your future. Interest earned as income is not taxable until the funds are withdrawn. And typically, this means less tax owed, since you're usually in a lower tax bracket upon retirement.

Contributions may be tax deductible in the year made, depending on income level and participation in employer-sponsored plans. Consult your tax professional to determine if your adjusted gross income allows you to qualify for a deduction for IRA contributions
Contributions may be made until the federal tax deadline, April 15th, for a prior year.
Catch-up program is available to individuals age 50 and older, where (currently) an additional $1,000* may be contributed.
Withdrawals may begin at age 59½ - and they must begin by the April following the year the participant reaches age 70½.
Typically, individuals are taxed on an annual basis for distributions taken that year.
Contributions may be made until age 70½.

(*May be adjusted annually for inflation in $500 increments.)

Roth IRA

This differs from a traditional IRA in that contributions are not tax deductible. Contributions are made from after-tax dollars, so IRA earnings will grow tax deferred. Interest earned is then tax exempt upon withdrawal, provided certain criteria are met.

A Roth IRA may be the best choice for you if:

You expect to be in the same or higher tax bracket after retirement.
You already contribute to a 401(k) or other company-sponsored plan.
You wish to continue contributing to your plan after age 70½.

Rollovers & Transfers

Rollovers and transfers are ways to move retirement assets from one plan to another, without incurring immediate taxation or penalties. Common reasons to do this are a change in employment or a desire to consolidate several accounts to one bank.

For transfers, you may transfer all or part of an existing IRA. There is no additional documentation for your federal tax return and there's no limit on the number of transfers, so you can time transfers of CDs and similar investments to coincide with their maturity dates.

For rollovers, in order to avoid tax penalties, you must deposit the funds within 60 days. You can only roll over funds once every 12 months for each IRA and you must document all rollover transactions when you file your federal taxes.

Catch-Up Contributions

Individuals who are close to retirement (and who may need to make up for lost time) may be able to make larger contributions. Individuals who have reached age 50 by the end of the year will be able to make additional catch-up contributions of $1,000* per year to their traditional or Roth IRA.

(*May be adjusted annually for inflation in $500 increments.)